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When you compare income equality versus marginal tax rate, it doesn't correlate in the way that supply siders say it should. Higher marginal rates, I.E. under Clinton, correlate with lessened poverty and less difference between rich and poor. Lower marginal rates, as under either bush or baby bush, correlate with greater difference between rich and poor, which proves the lie of trickle down. The underlying idea, that making someone incredibly rich makes them into a job creator and drags everyone else up a notch just doesn't actually hold true.

The tax cuts were never meant to improve income inequality or reduce poverty. The ideological agenda was quite different. When George Walker took office he had a balanced budget. The right and Alan Greenspan looked at a possible future where all government debt was repaid by 2011. And they didn’t like what that could mean, not in the slightest. Oh the peril of zero debt! It is weird, almost hilarious, but still true. They were afraid that the government would then start to invest the surplus in the economy, as in investing the surplus in Social Security trust funds for future use. Unacceptable!

… So, Alan Greenspan took to the stand and testified before the Senate budget committee, not as an economist but as an ideologue:

Originally Posted by Greenspan

I believe, as I have noted in the past, that the federal government should eschew private asset accumulation because it would be exceptionally difficult to insulate the government's investment decisions from political pressures. Thus, over time, having the federal government hold significant amounts of private assets would risk sub-optimal performance by our capital markets, diminished economic efficiency, and lower overall standards of living than would be achieved otherwise.

The way I read your post, it seems like the failing of both systems is to take into account that there are people involved, though one forgets individuals and the other society.

Reminds me of one of my favorite quotes.

Originally Posted by Martin Luther King

“Communism forgets that life is individual. Capitalism forgets that life is social, and the Kingdom of Brotherhood is found neither in the thesis of Communism nor the antithesis of capitalism but in a higher synthesis.”

__________________Ego, ain't it a bitch?

I think I'll reroute my trip
I wonder if they'd think I'd flipped.
If I went to LA, via Omaha.

I've got a simple perspective on this. I'm an experimentalist, a fan of evidence based practice. We do it in medicine, and I believe we should do it in other aspects of life as well.

It's a simple matter to find a number that serves as a proxy for quality of life in a society and compare that to the various forcings upon that society. My preferred proxy is income inequality, because I personally prefer to live in a society where everyone has at least enough than in a society with a few rich ****ers and everyone else in grinding poverty.

What if the cost of income equality is that everyone is poorer? Is it really such a worthwhile goal that everyone must forgo something just to ensure no-one gets a lot? It's not like it's a zero-sum game, what Gekko gets doesn't take away from what the guy playing World of Warcraft stoned all day does. Perhaps both these types of people are of worth and contribute to society?

I mean you can gussy it all up and make it sound noble, but what it amounts to is voting yourself somebody else's paycheck to make yourself feel better.

Originally Posted by Andrew Wiggin

When you compare income equality versus marginal tax rate, it doesn't correlate in the way that supply siders say it should. Higher marginal rates, I.E. under Clinton, correlate with lessened poverty and less difference between rich and poor. Lower marginal rates, as under either bush or baby bush, correlate with greater difference between rich and poor, which proves the lie of trickle down.

The underlying idea, that making someone incredibly rich makes them into a job creator and drags everyone else up a notch just doesn't actually hold true.

What exactly was the difference (taxwise) between the Bush years and the Clinton years compared to the 70% highest marginal rates Reagan inherited? Does that strike you as the sort of mass difference it would account for a total seachange over those eight years? Doesn't the GOP congress get any credit for that, being as they had control of both the House and Senate six of those years and would have had to pass any legislation he signed, in fact it was them sending him their legislation and budgets? Wasn't it Bill Clinton who said 'the era of big government is over' and signed both the 1996 budget which predicated that statement and also the welfare reform bill to 'end welfare as we know it'--mind you after vetoing each at least once?

What I'm getting at is Clinton governed more as a Republican than Bush did because it was mostly the Republicans writing his stuff, and it was the Democrats writing Bush's. A president's influence when the opposing party holds both houses of Congress is rather limited outside things like foreign policy and appointments, and Congress weighs in on that as well. '93 and '94 were not the boom years for GDP and revenues, that was achieved at the end of the decade.

Quote:

What I don't understand is how the supply side concept meshes with the rhetoric. The same folks who bloviate at length about lowering marginal rates, and helping out the captains of industry and job creators are the same people who also push the idea of the american dream, that everyone can be wealthy. The bigger the gap between rich and poor the less likely that anyone actually can lift themselves up by their bootstraps, and the more likely that you just have to be born to parents who can drop a couple of million to finance baby's first business venture. Everyone can point at a success story or two, but collecting that first million to invest is a daunting hurdle. Most of us will never be wealthy, no matter what we do.

The higher your marginal tax rate after 250k the more difficult it is to get to that first million.

Incidentally, I do believe there's a mass miscommunication as to what supply-side economics is, and one of those things it's not is an ideology. It was the result of many different economic thinkers who contributed to or participated politically in attempting to right a sinking ship in the early eighties when a rather curious bastardization of Keynes' thinking had become prominent and at the same time the United States had lost, or was losing, a significant comparative advantage it had held since the end of WWII. Some of them were democrats! Didja know that? Some were even liberals!--and still are. They didn't agree on everything either, and made some silly mistakes.

However as one can gather from the three basic precepts, a sound dollar, a dedication to lower marginal tax rates than the 70% that were being run at the time, and effective but not strangling regulation, is of course what the Clinton years were. A balanced budget with a slight inflation rate like during the nineties is as good as gold, even better in fact, but at the time ('80) the US had only come off the gold standard eight years before and many thought it might have contributed significantly to inflation, which was a major concern (double-digit inflation sucks!) at the time--and of course it probably did.

It has been so long now without serious inflation or interest rates that the gold standard is considered strangling and a relic; but as it's also true that governments throughout history have tried mucking with the currency with disastrous effect, to some avoiding catastrophe by short-sighted politicians was worth considering even though a well-managed monetary policy (ala Friedman) is more compatible with the ease of capital and credit that Keynes promoted and serves the kind of high growth economy where a 'rising tide lifts all boats' is more easily achieved.

For those who've perused the Wiki for information, (and some corners of the internet) it does appear it has been...scribbled upon...perhaps as a result of the campaign, and there's a lot of out of context quotes and utter dreck there. For example those who thought Greg Mankiw considered it the stuff of 'cranks' or whatever ought to read this, including this (more detailed) explanation of just one poorly understood application of the Laffer Curve along with a rebuttal of a commonly cited study.

Here's a fascinating discussion between Paul Krugman and some of the ones who were also there and remember it...a little better...than he. Here's another from a material participant which explains some of the technical economic details, with a little Bush-bashing for good measure. Note his allies in the Senate: Sam Nunn, Lloyd Bensten and Russel Long. When they were Republicans it was 'Reaganomics, 'trickle down' or 'supply-side,' when they were Democrats they were called 'moderates.' In fact it makes me wonder if Krugman decided to call the parts he liked 'New Keynesian' which in a sense is not implausible, as Keynes is a giant in economics and just as he built upon the classical model to improve it, others refined the work he did and discarded ineffective theories he and his successors had propounded.

__________________"They say the right things. They ‘speak truth to power’, ‘transgress boundaries’, and all the rest of it. But you will have noticed that they are careful only to challenge religions that won’t hurt them (Christianity) and governments that won’t arrest them (democracies)." - Nick Cohen.

I wish I could find the transcript. Friedman's arguments seemed convincing, then the counter argument blew him out of the water, then the rebuttal seemed reasonable and on and on the program went. It was incredibly informative.

__________________(*Tired of continuing to hear the "Democrat Party" repeatedly I've decided to adopt the name, Pubbie Party, Repubs "Republics" and Republic Party in response.)

I wish I could find the transcript. Friedman's arguments seemed convincing, then the counter argument blew him out of the water, then the rebuttal seemed reasonable and on and on the program went. It was incredibly informative.

Awesome. Thanks.

__________________Ego, ain't it a bitch?

I think I'll reroute my trip
I wonder if they'd think I'd flipped.
If I went to LA, via Omaha.

I mean you can gussy it all up and make it sound noble, but what it amounts to is voting yourself somebody else's paycheck to make yourself feel better.

A 2011 CBO study showed the top 1 percent of households received income gains of 275% between 1979 and 2007 compared to a gain of just under 40% for the 60 percent in the middle of America's income distribution. Clearly, the 1%-ers voted themselves somebody else's paycheck, and it just happens to be mine and yours.

Originally Posted by Kaosium

'93 and '94 were not the boom years for GDP and revenues, that was achieved at the end of the decade.

But as you Republicans say when I point out Reagan and Bush's tax cuts had no effect on the economy for a few years after they were enacted, it takes more than a few years for tax policy to work its magic.

Originally Posted by Kaosium

It was the result of many different economic thinkers who contributed to or participated politically in attempting to right a sinking ship in the early eighties

You're a decade off. "Supply-side economics developed during the 1970s in response to Keynesian economic policy, and in particular the failure of demand management to stabilize Western economies during the stagflation of the 1970s, in the wake of the oil crisis in 1973." -- Wikipedia

Originally Posted by Kaosium

at the time ('80) the US had only come off the gold standard eight years before and many thought it might have contributed significantly to inflation

Ahem. Oil crises in 1973 and 1979 caused the inflation of the period. The gold standard or lack thereof had little or nothing to do with it.

A 2011 CBO study showed the top 1 percent of households received income gains of 275% between 1979 and 2007 compared to a gain of just under 40% for the 60 percent in the middle of America's income distribution. Clearly, the 1%-ers voted themselves somebody else's paycheck, and it just happens to be mine and yours.

From another post:

Quote:

Originally Posted by Corsair 115

...the income growth trend was remarkably similar from 1947 to about 1979 across the quintiles and top 5%, but after about 1979 income growth starts diverging noticeably.

Below is a graph I made from Census Bureau data mentioned on the links given in that post. The values are based on constant dollars and are relative to each category's income level in the first year of the data series. The time period is from 1947-2009 (the latest year the source Census Bureau file went to at the time I created the graph).

Note the incredibly similarity in each category's growth relative to the starting year through to about 1979. Then notice how the lines markedly diverge after about 1979. Clearly some sort of fundamental changes took place in or about 1979. What was going on for the first thirty years that allowed such nearly identical rates of income growth? And what was happening in the next thirty years which resulted in such disparate income growth?

__________________Ego, ain't it a bitch?

I think I'll reroute my trip
I wonder if they'd think I'd flipped.
If I went to LA, via Omaha.

Or, most likely, the downturn in 1979 started as a normal recession wherein incomes would have rebounded after a year or two, but Reagan was elected and his tax cuts overwhelmingly tilted the table in favor of the wealthier segments. That, combined with his unionbusting and its effect on working-class wages, should account for much of the income growth disparity.

Or, most likely, the downturn in 1979 started as a normal recession wherein incomes would have rebounded after a year or two, but Reagan was elected and his tax cuts overwhelmingly tilted the table in favor of the wealthier segments. That, combined with his unionbusting and its effect on working-class wages, should account for much of the income growth disparity.

So firing the air traffic controllers for an illegal strike somehow affected working class wages?

I'm asking questions for a reason. It was these questions that led me away from the right. I can't find any evidence to support the conservative narrative. I can't even find a correlation. Can you? There seems to be a strong correlation that it all went to hell sometime in the 70's. Why?

Quote:

I'm dying to see how you tie this into deregulation of the airline and trucking industry. But we all know you will make no attempt at that, because you're "just asking questions".

Please to explain and I'll try and address your concerns. How did the deregulation of the airline and trucking industry change things? Do you have some correlative data or anything?

__________________Ego, ain't it a bitch?

I think I'll reroute my trip
I wonder if they'd think I'd flipped.
If I went to LA, via Omaha.

__________________"They say the right things. They ‘speak truth to power’, ‘transgress boundaries’, and all the rest of it. But you will have noticed that they are careful only to challenge religions that won’t hurt them (Christianity) and governments that won’t arrest them (democracies)." - Nick Cohen.

__________________"They say the right things. They ‘speak truth to power’, ‘transgress boundaries’, and all the rest of it. But you will have noticed that they are careful only to challenge religions that won’t hurt them (Christianity) and governments that won’t arrest them (democracies)." - Nick Cohen.

Please look at the chart from post #412 and explain why we had such long stable economic expansion following FDR's expansive social policies? Then please tell us why it went to hell following Reagan?

I'm not claiming it was Reagan's fault nor am I trying to establish cause and effect. I'm asking if people can show a correlation that might fit their beliefs.

FDR's policies might have had nothing to do with the expansion but how did it hurt and can you show that things got better when we deregulated and fundamentally changed taxation, etc.?

Lots of things happened. Timothy Noah has a list of what could have caused the Great Divergence (it’s a nice 10-part piece for which he was awarded 2011 Hillman Prize for magazine journalism); he sort of goes through a scholarly assortment in search of possible consensus over a few broad issues. There’s much focus on the notion of Institutions and Norms. Anyway, here’s his list of percentages of the responsibilities for the divergence, for which the federal government at least partially either did or failed to influence during that time. (Source: The United States of Inequality: Trying to understand income inequality, the most profound change in American society in your lifetime.)

Originally Posted by Noah

Here is a back-of-the-envelope calculation, an admittedly crude composite of my discussions with and reading of the various economists and political scientists cited thus far:

Race and gender are responsible for none of it, and single parenthood is responsible for virtually none of it.

Immigration is responsible for 5 percent.

The imagined uniqueness of computers as a transformative technology is responsible for none of it.

Tax policy is responsible for 5 percent.

The decline of labor is responsible for 20 percent.

Trade is responsible for 10 percent.

Wall Street and corporate boards' pampering of the Stinking Rich is responsible for 30 percent.

Various failures in our education system are responsible for 30 percent.

Lots of things happened. Timothy Noah has a list of what could have caused the Great Divergence (it’s a nice 10-part piece for which he was awarded 2011 Hillman Prize for magazine journalism); he sort of goes through a scholarly assortment in search of possible consensus over a few broad issues. There’s much focus on the notion of Institutions and Norms. Anyway, here’s his list of percentages of the responsibilities for the divergence, for which the federal government at least partially either did or failed to influence during that time. (Source: The United States of Inequality: Trying to understand income inequality, the most profound change in American society in your lifetime.)

Wow thanks. As a former conservative I thought the world was transformed after Reagan. He gave us "a rising tide that lifted all boats". No he didn't! Whatever happened it didn't benefit everyone. The data is clear.

__________________Ego, ain't it a bitch?

I think I'll reroute my trip
I wonder if they'd think I'd flipped.
If I went to LA, via Omaha.

I'm asking questions for a reason. It was these questions that led me away from the right. I can't find any evidence to support the conservative narrative. I can't even find a correlation. Can you? There seems to be a strong correlation that it all went to hell sometime in the 70's. Why?

Nothing went to hell. You and I live a life where we can spend 10 hours a day on a computer.... nothings gone to hell.

Further to that..... Why don't you post a chart showing life expectancy from the 1970's to where we are today?

Why don't you post a chart showing the amount of poor households that have air conditioning in the 1970's (when we went to hell apparently) to now.

Next post a chart showing how many of America's poor in the 1970's, owned a car or truck, a microwave or cable tv... to that of the poor now.

Someone has a narrative here... and it's not Virus.

I've not a clue what any of this has to do with anything. Could you explain? How on earth can any of that change the fact that the middle class is losing ground?

And Caper, these are YOUR claims. You post the god damn charts. I think your assumptions are silly. Having a microwave or a car doesn't obviate the real problems of being poor. Like the fact that there is much more violence and mental pathology among the poor and as the tide of poor rises so does the crime and pathology.

But you glibly dismiss all of that because some poor people have microwaves?

I'm calling BS Caper and I'm asking you to show your work and not simply come to a skeptics site spouting claims. POST THE CHARTS?

__________________Ego, ain't it a bitch?

I think I'll reroute my trip
I wonder if they'd think I'd flipped.
If I went to LA, via Omaha.

? Seriously? Are you really so solipsistic? It doesn't matter to you that so many people have either seen their wealth decrease because of inflation while the rich have become richer?

First of all, I had to look up what solipsistic meant. I still don't know how it fits.

If all these people have it better then they did 40 years ago I don't really care. Wealth buys stuff..... people have more stuff.

It seems to be your biggest concern is how big your neighbors house is.... You would rather you both live in a shack then him in a mansion and you in a house.

Is it perfect... no. Do you have ideas (even some that differ then mine) that will make a lot of peoples lives better? I'm sure you do. But when everyone is better off.... it is in now way going to hell.

And Caper, these are YOUR claims. You post the god damn charts. I think your assumptions are silly. Having a microwave or a car doesn't obviate the real problems of being poor. Like the fact that there is much more violence and mental pathology among the poor and as the tide of poor rises so does the crime and pathology.

And this was much better in the 1970's? I'm sure you're not saying it was great to be poor in the 1970's and we have since gone to hell in the last 40 years? Was there not mental health problems in the 1970's? Was there much less crime in the 1970's?

Where is the going to hell part? All I see is EVERYONE's lot improved... and your hell is that your neighbors improved more then you.

First of all, I had to look up what solipsistic meant. I still don't know how it fits.

You are incapable of seeing the world through the eyes of someone who is suffering because of the policies of the last 30 years.

Quote:

If all these people have it better then they did 40 years ago I don't really care. Wealth buys stuff..... people have more stuff.

They AREN'T better. That's the point.

Quote:

It seems to be your biggest concern is how big your neighbors house is.... You would rather you both live in a shack then him in a mansion and you in a house.

No. I want the wealth of everyone to rise at about the same level. The way it did from FDR to Reagan. What's wrong with that?

Quote:

Is it perfect... no. Do you have ideas (even some that differ then mine) that will make a lot of peoples lives better? I'm sure you do. But when everyone is better off.... it is in now way going to hell.

The lives of those people who have to struggle to survive is hell. I've lived it. I'm not saying all of America has gone to hell. I'm saying that because of many of the policies since Reagan many people's lives have been unnecessarily made worse.

__________________Ego, ain't it a bitch?

I think I'll reroute my trip
I wonder if they'd think I'd flipped.
If I went to LA, via Omaha.

And this was much better in the 1970's? I'm sure you're not saying it was great to be poor in the 1970's and we have since gone to hell in the last 40 years? Was there not mental health problems in the 1970's? Was there much less crime in the 1970's?

I'm saying that after FDR the wealth of everyone rose relatively the same. Since Reagan the wealth for the lower quintiles have been static.

Quote:

Where is the going to hell part? All I see is EVERYONE's lot improved...

No. Look closer at the chart. The lower tiers are flat or slightly increased and that's not factoring inflation.

BTW: What the hell is wrong with things the way they were before Reagan? What's wrong with everyone's wealth rising equally?

__________________Ego, ain't it a bitch?

I think I'll reroute my trip
I wonder if they'd think I'd flipped.
If I went to LA, via Omaha.

The lives of those people who have to struggle to survive is hell. I've lived it. I'm not saying all of America has gone to hell. I'm saying that because of many of the policies since Reagan many people's lives have been unnecessarily made worse.

I've been broke too... it's not hell. Life in a concentration camp is hell...... life in a North Korean Gulag is hell. Being poor in a Western country is not hell.

I've been broke too... it's not hell. Life in a concentration camp is hell...... life in a North Korean Gulag is hell. Being poor in a Western country is not hell.

Dude, I'm seriously not interested in a petty semantics argument. I think what has happened is really bad and just because you've been broke doesn't mean that you had my life's experience (solipsism is, in part, to assume that your life's experiences are the same for others). People are varied and suffer differently. I became disabled and was a day away from living on the street. A JREF member took me and my wife in and friends took in my children. It was 6 months of hell. If you don't like the word tough. I'm not debating it.

__________________Ego, ain't it a bitch?

I think I'll reroute my trip
I wonder if they'd think I'd flipped.
If I went to LA, via Omaha.

Dude, I'm seriously not interested in a petty semantics argument. I think what has happened is really bad and just because you've been broke doesn't mean that you had my life's experience (solipsism is, in part, to assume that your life's experiences are the same for others). People are varied and suffer differently. I became disabled and was a day away from living on the street. A JREF member took me and my wife in and friends took in my children. It was 6 months of hell. If you don't like the word tough. I'm not debating it.

Well... your obviously more invested in this debate then I am.. so I won't throw any more darts.... But I am skeptical that certain tax policies had as much to do with the rising fortunes of America's social classes.

I don't want to go back before Reagan... when everyone was worst off then they were now.

That's arguable but beside the point. The lower quintiles are stuck. There is far less upward mobility for the poor and lower middle class. I very, very much want to go back to the trend before Reagan.

And what's so much better about today for the poor? They have less chance of moving ahead than ever before. It's true that cheap technology has in many ways made their lives better but I'm afraid that is simply insufficient to justify this current trend of the poor and lower middle class having less and less disposable income.

Conservatives have this soothing narrative about the poor living like queens and kings in America. It's BS. Many of the problems that are caused by poverty like crime and mental pathology have not significantly changed.

__________________Ego, ain't it a bitch?

I think I'll reroute my trip
I wonder if they'd think I'd flipped.
If I went to LA, via Omaha.

Well... your obviously more invested in this debate then I am.. so I won't throw any more darts.... But I am skeptical that certain tax policies had as much to do with the rising fortunes of America's social classes.

Really? When I was a Conservative I took every opportunity possible to tout deregulation and changes in tax policy. Reagan was credited with an economic boom. So, are we just cherry picking? Special pleading?

__________________Ego, ain't it a bitch?

I think I'll reroute my trip
I wonder if they'd think I'd flipped.
If I went to LA, via Omaha.